Even with the explosion of the cloud, many enterprises still want a ‘private network’ approach for their network security to ensure data residency, data sovereignty and low latency that meets their business needs and regulatory compliance requirements. MSSPs are uniquely positioned to help enterprises who want to outsource their physical firewalls with a firewall service that is easier to manage and keeps up with the latest security solutions for better threat protection.
However, it doesn’t make business sense for MSSPs to introduce a service if it costs them too much in dollars or engineering resources. That’s why a hosted managed virtual firewall service (VFS) needs to leverage automation and intelligent orchestration for you to see returns in terms of efficiency and (maybe more importantly) in terms of investment. So, what does a business plan look like for an MSSP thinking about offering this type of cutting-edge service? We’ll break it down for you.
A Sample Business Plan
Let’s assume you’re an MSSP that wants to offer a virtual managed firewall service in four data centers across the U.S. You want speed of service delivery, flexibility of choice for your customers, and a clear new revenue opportunity that has a reduced cost of service delivery compared to traditional approaches.
Define Your Service
First, let’s assess the type of customer you’re targeting so you can determine their bandwidth needs. Let’s say your clientele are SMBs and organizations with less than 10Gbps of traffic that needs firewalling. You can create three offerings that cater to them:
| Low | Moderate | High |
|---|---|---|
| <1 Gbps | 1-2 Gbps | 2-4 Gbps |
Then you will want to define different service offerings to give enough choice to your customers without burdening your business with extra cost. Of course, there is always room to create ‘custom’ offerings, but for the purpose of this example we are sticking to two security service bundles:
| Standard | Premium |
|---|---|
| URL + Threat Prevention | URL + Threat Prevention DNS + Zero-day |
Price Your Service
Once you’ve selected your bundles as described above, you can price them out. The example below prices the different bandwidth offerings mapped to the two service bundles:
| ANNUAL SUBSCRIPTION | <1 Gbps | 1-2 Gbps | 2-4 Gbps |
|---|---|---|---|
| Standard | $4,800 | $6,800 | $11,800 |
| Premium | $6,500 | $9,500 | $15,500 |
Naturally, pricing will vary depending on your geography. But for this example, based in the US, these pricing levels are extremely competitive compared to what is on offer. This is very important in a competitive space, and especially key if you want to entice new customers to your service. You will also want to consider your contract length and we suggest that you try for three years to give you stability for the service and for the customers to see true value.
This pricing, leads to a few key questions, “what are my costs? can I be profitable? won’t it take a lot of training and internal resources?”
Costing of a Virtual Firewall Service
Because we’re talking about virtual firewalls, not physical ones, you’re going to benefit from a much lower TCO compared to a physical appliance approach. And, since you are using virtual firewalls rather than physical appliances, you will be able to stand up new clients with lightning speed and with very little effort.
Using virtual firewalls for your service means you only need to pay for each firewall as you bring on a new customer.
- You don’t have to plan redundancy into your purchases or architecture.
- You don’t have to pay for the licenses and support over the life of the hardware.
- You save on costly and scarce DevOps resources to develop, test and maintain physical hardware.
This table shows the purchase cost of the virtual firewalls, services, and orchestration software rolled up to support your service offering. It gives you an idea of your margins at the basic service implementation level. You can see for yourself the savings compared to purchasing hardware.
| COST OF VIRTUAL FIREWALLS | <1 Gbps | 1-2 Gbps | 2-4 Gbps |
|---|---|---|---|
| Standard | $1,767 | $2,967 | $7,267 |
| Premium | $2,400 | $4,100 | $10,767 |
| COST OF HARDWARE FIREWALLS | <1 Gbps | 1-2 Gbps | 2-4 Gbps |
|---|---|---|---|
| Standard | $5,917 | $11,183 | $15,533 |
| Premium | $7,550 | $14,300 | $19,867 |
Boost your bottom line by $1M
With these figures in mind, let’s go back to our US-based MSSP with four data centers. They can expect to bring on 30-40 new customers in their first year, ramping that up to 60 in year two and 100 in year three. This brings 200 new customers to their business over three years. Using an average customer profile, the hosted managed VFS will easily contribute $1M+ to the bottom line without requiring new equipment, staffing or training. When looked at like this, offering an automated virtual firewall solution becomes a no-brainer.
These days, your customers look to you as an MSSP to host and manage their firewalls. Physical firewalls are becoming increasingly complex, and enterprises don’t want to invest money and engineering resources in an area which distracts from their strategic goals. As an MSSP you can capitalize on this opportunity by switching to an automated virtual firewall service. You get improved ROI (thanks to lower costs and a pay-as you grow model), faster time to deployment, and simplified operations. Your customers get to easily scale their capacity to keep pace with increasing traffic volumes, while accessing all the next generation security features for increased threat protection. It’s a win, win.
Download our Business Case for Offering a Hosted Managed Virtual Firewall Service to get more details.
Pricing and costing information pulled from publicly available sources.